Case study: Planet Fitness and knowing your niche

Karl R. LaPan, President & CEO, The NIIC
Photo by Shutterstock

It’s that time of year when American gyms are packed. Some gym-goers are new to the pursuit of fitness altogether, while some are returning after a stint away during the holidays. Planet Fitness has carved out a niche in that it pursues the former. The New Hampshire–based gym franchise’s business model relies on this key demographic of newbies as its bread and butter.

“Forty percent of our members had never belonged to a gym before joining Planet Fitness,” CEO Chris Rondeau told Forbes. “We’re really going after that casual first-timer.”

But how can you win charging $0.25 down and $10/month? Oddly enoughof the members who get gym memberships, “about HALF never actually visit the gym once”. This is the dirty little secret of why low-cost gyms make money because their facilities were never built to accommodate the number of people who buy memberships, and while almost 11% of all gym membership sales happened in January each year their enthusiasm wanned by the 17th of January and dropped their attendance at the gym more dramatically by late March. In fact, less than 20% of gym-goers use their gym membership consistently.

There’s a market here, because amateurs can feel intimidated, or shall we say “gymtimidated” by typical fitness environments. Cohorts of ultra-fit people at the gym can deter some newbies from returning because they don’t feel like they fit in or people are judging them.

Although in their marketing they imply they’re “for everyone,” that’s not really the case. They don’t explicitly say “no meatheads” but it’s implicit in their availability of equipment, rules, and marketing. You won’t see bodybuilders deadlifting 300 pounds at Planet Fitness gyms because their facilities don’t accommodate that type of activity. They discourage audible displays of brawn (like grunting) you might experience at other gyms. According to their website, “we create an environment where you can relax, go at your own pace, and do your own thing without ever having to worry about being judged.”

In a sense, they aspire to be the opposite of competitors in their approach. They know who they are and what they’re about – and that’s exactly what makes them so successful. In this way, Planet Fitness can serve as a case study for businesses in any industry. While most organizations create a niche by figuring out whom they DO want to serve, Planet Fitness has built their business by deciding who they DON’T want to serve.

What can you learn from Planet Fitness’ approach?


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